Cyrus Mistry sets up Group Executive Council to reshape Tata Group

MUMBAI: Tata Sons Chairman Cyrus Mistry has set up a brain trust, comprising a set of young leaders, which will provide strategic direction to the Tata Group on a wide gamut of issues ranging from return on investment to defining a "Tata way of working".

The new body, the Group Executive Council (GEC), replaces two internal panels that were performing similar functions, marking a significant initiative by the new chairman to reshape the conglomerate after Ratan Tata retired late last year.

"The Group Executive Council, under the aegis of the Tata Sons Board, will now assume responsibility for all the roles earlier performed by the Group Corporate Centre (GCC) and the Group Executive Office (GEO)," a person close to Tata Sons said.

The GEC members will include NS Rajan, who will lead human resources; Mukund Rajan, who will oversee brand, communication, ethics & CSR; and Madhu Kannan, who will head business development and public affairs. Other members of the GEC will be announced in due course, the person close to the Tatas said.

Except for 51-year-old Rajan, an HR professional who will quit Ernst & Young to take charge at the Tata Group on May 9, the other members of the GEC - Rajan, Kannan and Mistry himself - are all in their 40s. "The age bracket is falling everywhere," the person explained. ET was the first to report the appointment of Rajan.

"The feeling is that Mistry is building his own team, where he can influence decisions with the blessings of Tata," said Kavil Ramachandran, Thomas Schmidheiny Chair, professor of family business and wealth management, Indian School of Business. "Power will move from the old guard to GeNext at Bombay House," he added.

The move to keep the council young reflects Mistry's game plan for the long term.

The new chairman has set up teams - under the ambit of Tata Sons - that head different business verticals and help him strategise and implement plans. "It is a very clear long-term approach of team-building that goes beyond the old guard. The advantage is that he'll be able to bring in some fresh thinking in terms of defining the destiny of the company. It is also part of the succession planning," Ramachandran added.

The agenda of the GEC covers a wide spectrum, including return on investment with a long-term perspective; support for and shaping the agenda for philanthropy and preserving and enhancing the reputation of the Tata name. Its other tasks include defining and driving a Tata way of working for group companies and playing a proactive role so the group fulfils its responsibility as a global corporate citizen, a statement said.

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The GCC and GEO, the internal panels that have now been scrapped, were set up by Ratan Tata in the late 90s and early 2000 to strategise and implement the group decisions. In the previous dispensation, the Group Corporate Centre served as the strategic think tank for the entire group. The Group Executive Office, meanwhile, provided operational support to the chairman to manage the diversified conglomerate that has 100-odd operating businesses. The GCC and GEO comprised senior members of Tata Sons and Tata Industries, the two holding companies of the group. Under Mistry, the functions of the two councils are being folded into the newly established GEC.

"Instead of relying on the existing team, he is creating another pool of resource he can tap into," Ramachandran added. The GEC will henceforth provide the strategic and operational thrust for the group to venture into new areas, and also bring in synergy within group companies. Significantly, members of the disbanded Group Corporate Centre, which comprised members of Tata Sons, are not in the new council, but they will be around to mentor and advise the council whenever needed, the person close to Tata Sons added. He said the "search is on" for a senior finance executive to be added to the nodal council at an appropriate time.